The Death of Intermediaries? Maersk’s Canary in the Coalmine.

This is an old blog we lost during our transfer of site hosting.

Maersk, the world’s leading container ship operator, and Alibaba, the owner of China’s biggest e-commerce platforms, have decided to join forces in what has traditionally been the domain of NVOCCs
and Freight Forwarders.  The two have established a portal to allow shippers/customers to use Alibaba to book space on Maersk vessels. This union illustrates the growing trend of e-commerce and logistics firms working together, and to me sounds very much like an early warning signal for the great diminishment, if not demise altogether, of NVOCCs and Freight Forwarders.

Effective December 22nd, 2016 Chinese shippers obtained the ability to reserve space through Alibaba’s OneTouch booking website. OneTouch is intended to cater to small and medium-sized Chinese exporters by providing online services including logistics and customs clearance. OneTouch also gives these exporters access to platforms where they can book air freight and parcel delivery services while still supporting the business-to-business marketplace that Alibaba is known for. Traditionally, shippers had gone through freight forwarders in order to book on container vessels.  However, vessel operators such as Maersk are beginning to streamline this process by allowing the beneficial owner of the cargo (the shipper, rather than the shipper’s intermediary) to book directly from the internet.

What does Alibaba gain from its involvement in this? In recent years, Alibaba has been making inroads into logistics services by buying warehouses and taking stakes in couriers.  E-commerce giants are increasingly venturing into logistics in order to enhance their control over the supply chain networks they work with.  Amazon, for example, has dedicated fleets of aircraft, drones, and stores (which are actually mini warehouses/distribution centers), and is rumored to be planning its own U.S. domestic delivery fleet.  Walmart will not remain far behind: its brick and mortar locations and existing truck fleet give it a strong start in the logistics arena.

When asked about the Alibaba partnership, Maersk said that this was part of the shipping line’s plan to provide digitized services to consumers and that it plans to initiate more pilot programs on third-party portals in the near future. Maersk stated that the launch of the service was not focused on bypassing the industry’s traditional middlemen (freight forwarders and NVOCCs), as the OneTouch platform still engages freight forwarders to offer some services, including haulage. Though it may not be the public goal of this joint venture, bypassing intermediaries will inevitably be an effect.

Many tech startups have launched services like this one, attempting to bypass third-party shipping services, but until now Amazon has been the only other high-profile company to venture into these waters. This new partnership between Alibaba and Maersk will add another big name to the list of e-commerce companies exploring a streamlined process, as well as giving carriers a chance to see how these online retail capabilities mesh with their shipping business.  Forwarders and NVOCCs are well-advised to watch this trend closely, and be careful about large investments in physical facilities. A look at today’s ghost towns which were formerly bustling shopping malls gives you a hint of what could be if intermediaries become very easily done without.

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